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Tax Tip 1 – The Personal Allowance

March’s budget set the 2015/6 personal allowance at £10,600 and it is due to rise to £10,800 next year and £11,000 in 2017/18. If we believe the Conservative Party election manifesto we could see a Personal Allowance of £12,500 by April 2020.

Even now, many of us don’t use our personal allowances fully and there is still a gap o over £2,500 between it and the starting point for National Insurance contributions.

At the other end of the income scale there are some of us who have no personal allowance this year as our income exceeds the £121,200 threshold at which point the allowance is tapered to nil.

If you or your partner do not use the personal allowance, you could end up paying more tax than necessary. There are several ways to maximise use of your allowances.

• Choose the right investments: some investments do not allow you to reclaim tax paid while others are designed to give capital gain, not income.

• Couple should consider rebalancing investments so that so that each has enough income to cover their personal allowance.

• Make Sure in retirement you and your partner have enough pension income. The basic state pension (£115.95 a week in 2015/16) alone is not enough.